Sean Barrett and University Reform

Occasionally I post guest posts from friends. This is one, from Senator Sean Barrett on his recent universities bill.

Prof. Stephen Hedley of the UCC Law School has written the following comments on my bill, the Higher Education and Research (Consolidation and Improvement) Bill 2014. The following is a response to the comments made by Prof. Hedley. The debate on the bill can be found here and The bill itself can be found here with the Explanatory Memorandum here:

Prof. Hedly’s original commentary can be found in a series of posts :

• http://9thlevel.ie/2014/04/04/the-higher-education-and-research-bill-2014-1-introduction/
• http://9thlevel.ie/2014/04/05/the-higher-education-and-research-bill-2014-2-the-third-level-sector-and-government/
• http://9thlevel.ie/2014/04/06/the-higher-education-and-research-bill-2014-3-individual-institutions-objectives-and-functions/
• http://9thlevel.ie/2014/04/06/the-higher-education-and-research-bill-2014-4-individual-institutions-governance/
• http://9thlevel.ie/2014/04/08/the-higher-education-and-research-bill-2014-5-staff-tenure/

I would like to start this response with a few housekeeping matters. As many of you would know I have been a constant and very vocal critic of the managerial approach to higher education on this Island since the 1997 Act was a glint in the Rainbow Coalition’s eye. I am an economist and understand that the use of the public purse requires oversight, especially when it runs around €1.5bn for the overall sector. The final matter of housekeeping, and one which Prof. Hedley might not be fully aware of, is the limitations of being a Senator who is not a member of the government. Private members’ bills have to conform to a certain rubric. This rubric is very constraining to what you can or cannot do in your legislation. The following are the primary limitations:

1. I am a Senator. A Senator cannot initiate or modify money bills. That means that you cannot create a bill creates or eliminates a tax. As such when we comment on the Finance Bill all we can do is provide “recommendations” not amendments as per usual. All power in money bills resides in the Dail.

2. A Senator cannot initiate a constitutional amendment. That again can only be done in the Dail.

3. A non-government Senator cannot initiate a new bill that generates a direct cost to the exchequer.  I can make modifications within existing structures that already have line items in the Book of Estimates but I cannot expand those line items or create any modification that would impose personnel changes or expand establishment numbers. Again those are powers occasionally granted to Government Senators but primarily held by the Dail. The power to use this rule is wide ranging with Mary Robinson’s first PMB on family planning being stopped due to the cost of the paper the legislation was to be printed on. As such the ability to have any PMB that is not purely regulatory pass through the Clerk of the Seanad’s Office is in part a function of grace and favour and any legislation that the Government really wants to stop they can strangle at birth.

4. Given the number of bills generated by the independent university senators, this bill required introduction, and could not be presented, which is the other technique for tabling a bill. As a result of the introduction procedure the bill must be ready at a certain time and in a certain form. Certain limitations due to the St. Patrick’s Day holiday limited the opportunity for the bill to be reviewed by the wider public before it went to debate.

5. The nature of legislation proposed as PMB and within the Seanad is that you are typically required to generate exclusively regulatory statements or you have to propose a modification of an existing statute in order to remain on the right side of the standing orders.

6. As I stated before, I am firm believer in the idea that the university sector is over-managed and in many ways misguided by money, government quangos and limited time initiatives that sap energy, funds and people from the main business of a university – educating people and creating knowledge. If I was the Minister for Education and had the ability to create de novo an entirely new approach to the higher education sector I would have proposed legislation that was vastly different to the legislation that I drafted. The fact of the matter is that the legislation I drafted was accepted by the Minister. The abiding lesson that I have learnt while being a senator is that legislation is messy. Many times it is poorly drafted. Many times the drafting runs contrary to what the minister or the department wants. I have laid down many amendments, some of which have been accepted in order to offer corrections or modifications or to raise matters that I felt needed further consideration. No legislation is perfect out of the egg and needs to be developed and matured. Ultimately, the appearance of legislation tends to be camel-like. Nobody is very happy, nobody is very annoyed but something agreeable to most has been achieved and it does what is required and unfortunately tends to lack the elegance of a horse. This is especially the case in Ireland where the legislation doesn’t tend to have the time invested in it that you would find in places like Westminster and where an excess of 70% of the legislative activity generated at Leinster House has been initiated by Brussels, and not Dublin.

Having addressed some of the general issues, now let me address the particular.

Simplification. I agree with Prof. Hedley in part. I have attempted within my limitations to simplify. My initial approach, if I were the Minister for Education, would be to take all existing legislation, repeal and redraft it into a new statute. The aim would be to provide a piece of legislation similar to that produced by the Estonians or the Finns on higher education. All their institutions and their funding and operations are decanted into one piece of legislation or one piece with two parts. It is simple, it is elegant and it is functional. The advantage of these legislative proposals is that they are compact and allow a lot of autonomy in the areas of hiring. The 1997 Act is not the worse act as a genre of legislation (I might place the devolved application of the 1988 Education Reform Act in the UK under that category) but certainly does not reflect the fundamental changes that have taken place in the sector and face it over the coming years. The 1971 HEA Act is no longer fit for purpose. The HEA is a fundamentally conflicted organization. It is regulator, advocate and funder. I would have a desire for something closer to the old UK University Grants Committee, which was a sub-division of the Treasury and as such had an understanding of funding models, project appraisal and cost-benefit analysis. The HEA lacks the capacity to do any of these most basic of economic tasks. The poor quality of the statistics collected on the higher education sector is a reflection of this position as an entity that has the right in interven but in the absence of a base of evidence. Evidence-free policy is a long tradition in Ireland but not one which should be venerated or continued. The main complication since 1997 has been the fact that the pension liabilities of the major universities (except DCU and UL) have been taken over by the Exchequer. This places a series of new de iure and de facto limitations on the higher education and research sector that previously would not have been envisaged or contemplated. Since these concerns are about economics and not about administration there were not included in the existing legislation but now bear an overly large impact on the sector.

 

The issue of homogenisation is important and I think one that we need to discuss. I am not an advocate of homogenisation of higher education but I am an advocate of financial accountability. This is where the tension is in the bill and why I created 3 categories. I could have created more but I had hoped to follow the university, IOT and TU divisions that are being created by the government at the moment. I could have created a Category IV that reflected the aims of research-only or 3rd sector institutions. The model used in France and Germany where research is separate but in some circumstances adjacent to universities could have been used. The nature of universities in Ireland is such that it is difficult to think that there is a natural role for a Max Planck-style system to be developed. It is important that understand that the homogenisation of the university sector has been happening quietly for a long time. Since the 1997 Act unified all the universities under one roof the desire for other institutions to become 1997 universities has been taking place. Trinity is a unique institution in Ireland as a university. It is in keeping only with the original charter of St. Patrick’s Pontifical College in Maynooth, not NUIM. The model itself is unusual even within these islands. The 1908 universities, UCC, UCG, UCD, QUB were modelled on the University of London. The NUI is the examining university with cheap and cheerful appendages that do the teaching. The University of London, the moribund University of Wales and the universities created in British Empire colonies all followed this model. They were to be different than the traditional universities and to be different from the so-called “Civic Universities”, like Manchester. They were “godless”  places, an accusation taken very seriously by supporters and opposers of the London model. The old universities following the passing of the 1871 Universities Tests Act and in the case of Ireland and Wales following the disestablishment of the Anglican church began to look more and more similar to their godless cousins. In Ireland this took on a faster pace following 1922 but stalled while the famous “ban” of Archbishop McQuaid remained in place until the early 1970s. The 1997 Act defined universities are very much a homogenised grouping from their past classifications. The issue is mission. Mission is where the problem exists.

The worry about homogeneity is mission and mission is about money. Australia made a mess of it. The UK made an unholy mess of it. Ireland has just about made a mess of it. The regulation of the higher education sector is about mission and mission is determined by money. Let us look at the situation of the UK, since we have the closest model of failure close to hand. The UK had an unusual mixture of institutions. The traditional classification was Oxbridge + Other. Financially, that is not too incorrect a view. Oxbridge has more money, both from public sources for being Oxbridge (like Eton, Winchester and Westminster it helps to have most of cabinet as alumni) and the rest from a fairly reliable rubric. Universities were expanded following the Robbins Report in 1963 with the able assistance of Richard Layard. Robbins was a giant in his field of economics and Layard was to become one of the dominant figures of British economics during the 20th century.  Economically and educationally Robbins distanced himself from the report in the 1980s as he saw the system and student numbers expand and felt the process had been a failure. There was a robust and well-funded system of polytechniques, one of the oldest being Westminster. Westminster was designed to deal with the rise of the Technical Universities that would be associated with the industrial powerhouse of 19th century Germany. These were practical places where engineers and scientists dominated. Newton, not Plato was the model. In the UK these bodies were funded by local authorities and hence had a local character and fitted into the superstructure of local government concerns. When Major granted university status to all the money ceased to be from the local authorities and was allocated by HEFCE. The polys suddenly began to follow the mission of the universities, even though they were very clearly oriented towards practical and local considerations as a result of their monetary allocations and their governance structures. The monetary incentives were towards becoming research universities and the polys began to mission creep and become more like universities. Typically this was accomplished by a combination of managerial practices, predatory RAE-driven hires and mergers. The mixture of missions disappeared. This was further amplified by the regional policy objectives of Scotland, Northern Ireland, Wales and England. All running university policies that were vastly different with completely different approaches to funding.

There is another category that also needs to be considered, the further education colleges. These continue to exist independent of universities but many former polys and national university systems had FE colleges that were feeder schools. Again the mission-creep by these institutions has been towards turning FE colleges into universities, either outright or as satellite campuses. This again has been damaging to the original mission of these organisations and has further confused and homogenized the term university in the UK.

What I propose is nothing of the sort. My objective is, as far as possible is to set up a system where money is determined ex ante by the D/Education and D/Public Expenditure. That money is granted. The institutions are obliged to account for it and that is end. The Strategic Innovation Fund allowed small amount of competitive money to wag of the the institutional dog in the name of becoming better organisations under the aegis of an organisation with no economic analysis and so purposeless that it was slated for destruction by Colm McCarthy in his Bord Snip report.  The categories are aimed, as best I can within the legislative framework give to me, to ensure that they remain different. This is especially important for the new Technological Universities. They are supposed to be Irish Eindhovens. This is a laudable objective. Eindhoven graduates command better salaries than their university counterparts, are generally known to be more employable and enjoy Ryanair direct flights. They are of course held in slightly less esteem than their university counterparts but then again, they have Ryanair direct flights so most are not that worried. Ultimately, Eindhoven has Philips, the international technology giant. Ireland has nothing even approaching Philips. Philips invented the CD as well as many other things. Ireland invented…. (Imagine if Ireland invented the CD… the IDA would never stop dining out on that and they would subject Americans to TV ads with glittering CDs while declaring the need to invest in Ireland.) The bill hopes to keep the division between the bodies of university, IOT and TU but ultimately it will be money and incentive schemes that will determine the difference between homogeneity and diversity.

I should add a note here about two external factors. Domestic research funding, most especially capital funding, and league tables. Domestic research funding, as Morgan Kelly has recently highlighted, created an industry of support staff. The Bord Snip report recommend the termination of these staff due to their high costs relative to the people who actually do the research, usually 2-3 times the salary of a postdoctoral researcher. The nature of EU Commission funding under FP7 or Horizon 2020 also requires expensive functionaries to apply for and if lucky enough to get, to operate. The transaction costs overhead of such competitive research structures are always assumed to be zero. It is not that uncommon a habit for non-economists to assume that all transactions costs are zero but in reality they are non-negative. The proof of this is how specialized universities, such as Cranfield in the UK, largely ignore such funding and go straight to industry which is driven by results and not by the quantum of activity. The desire to obtain such grants causes institutions to change mission and purpose. This is clearly the story of why WIT and others wanted to be universities.

Rankings are also part of this process of homogenisation. Universities economics is a subdiscipline of industrial organization. It is studied seriously in the US. These textbooks begin with presenting a simple firm-level model. Normal firms seek to maximize profits while minimizing costs. You can obtain much of first and second year economics from the manipulation of isocost and isoprofit curves. Universities don’t maximize profit, since they are not-for-profit, they seek to maximize prestige. Prestige comes from peer esteem and excessive application numbers and loyal alumni but in today’s Twitter and Facebook driven world it comes most of all from the media. University rankings fit perfectly to the modern 240 character, 36 second soundbite culture. Universities chase such rankings. If they are on bottom or falling, they don’t matter. If they are on top or rising they are Bacon’s New Science. Ultimately they can do anything but ignore them. Yes, they are unscientific. Yes, they are largely reverse engineered.  Yes, you should not want trust anything important to the people the build these tables. Yes, they have a clear, homogenous, 240 character long definition of what a “good” university is and if you are a university, or IOT or TU or FE college president you want to make sure you can fit those metrics. The THES, QS and Shanghai rankings will do more to homogenize the sector than all the legislation Leinster House could ever pass. When the World Bank has a text entitled Creating World Class Universities you know that the Mr. Ford and his Model T has hit higher education.

 

On the aims of the university sector, its institutions and staff. Vacuous statements may be what Prof. Hedley feel they are but they are replicated in the higher education legislation throughout the Nordic and Baltic nations. The comment about the categories is fair. I think that I would counter that special aims of the IOTs and the TU should be outlined within their statutes and by their governing authorities. The one matter that would concern me is how the statutes of the TU would be drafted. I would not like it that the TU statutes be given in a pro-forma fashion to the institution. The TU would be at a great advantage in that would be “baggage free” something that made the statute revision process for Trinity so complicated and required Prof. Eoin O’Dell of the Law School at Trinity to spend so many years at the process.

In similarity of aims I would say that I favour the lofty over the prosaic. Part of the reason why we are in the predicament in which we at present find ourselves is due to the instrumentalist approach taken by the civil service. I fear that the civil service sees the higher education sector as a mincer producing ground graduate at cut-rate prices per pound (no unfortunately with a lot more sawdust mixed in than in the past) for the multinational sector and emigration. While not grinding out graduates the sector can also act as a good holding pen for surplus young people and somehow, while all this is going on invent the “bright green nanobot” that will be more profitable than Google and provide more jobs than General Motors. Anyone with the misfortune to read documents on the aims and objectives of “Education Ireland”, “Innovation Island”, the “Action Plan for Jobs” or the “2014-2020 Medium-Term Economic Strategy” will realise what vacuity really is and how dangerous the instrumentalist approach is to the future of higher education in Ireland.

In terms of governance there are a few things. I agree with Prof. Hedley. An independent chair is an absolute necessity. There is also a cultural issue. University presidents during the boom years took on “princeling-like” tendencies when it came to spending, as the bankers have so succinctly put it, OPM, other people’s money. The boom gave rise to an element of what economists call “Dutch Disease” where expenditure and investment on low productivity activities is supported by windfall income gains. In this case Stamps and VAT created a buoyant Exchequer that let project appraisal got by the board and let those with access to the public capital programme or Exchequer funds run amok. Though the Comptroller and Auditor General understood the sector to be very cost effective and the European Commission also found Ireland to be very cost efficient relative to the rest of the European Union, the C&AG did find that the university presidents were not the best custodians of funds and hearings in front of the PAC didn’t cover the presidents of the universities or the IOTs in glory. Since the country is still broke anything in receipt of public funds needs a belt and braces approach to accountability. The current approach has some serious pitfalls.

The length of time in office for the chief officer is limited to 48 months as are the members of the governing authority. The governing authority that I most appreciated was the old Trinity board made up of the 7 Senior Fellows and the Provost with many other in attendance. It was collegiate, it also had what A.A. Luce felt was the key ingredients in a functional board: enough old people that don’t care what happens to them and enough young people still ideal-driven not to care what happens to them all ganged up on the people in the middle who see the board of the College as a method of personal advancement. Since the Senior Fellows tended to be (a) older and (b) superior academics to the Provost the power relationship was such that solo runs or blatant attempts to provide preferment were pretty quickly dispatched. It was not perfect and not without challenges, as A.A.Luce would have experienced personally in his time but it eliminated some of the problems that exist at present. Limiting the time frame of members to 48 months actually extends their time slightly but also lines up better with the president. The current model results in overlapping board with different presidents. Such situations can create inheritance of agenda problems for the new chief executive.

The chief officer being given 48 months with the option of renewal for another 48 months is a product of not only views from abroad about the role of the university president but also personal observation. I have been at Trinity College since the early 1970s. I have witnessed the tenure of A.J. McConnell, Leyland Lyons, Bill Watts, Tom Mitchell, John Hegerty and now Paddy Prendergast. The one consistent thing between all these men was that they were broken and exhausted by the time their terms ended. Thankfully this is not a permanent condition with Bill Watts, Tom Mitchell and John Hegerty now enjoying active retirements but 10 years is too long. I understand the concerns. It takes time to learn your job. As the joke in the West Wing went, “I only just learned how to use the phones!”. That is why there is an option for renewal, but that renewed mandate is important. 10 years is 3 to 3.3 undergraduate cohorts. It is (if the country was not broke) over 2,000 new staff members in the higher education system as a whole as result of staff renewal. It is two or three governments. 10 years is the difference between a toddler and a teenager. A renewed mandate would keep a president going. It would also mean that one that has lost confidence of his people would not be detached from his staff for years to come or investigating the better lunchtime locations around the campus. University presidents and Taoisigh desire to leave their mark regardless of being there 4 years or 40. They all do, how elegantly is a function of personality, not policy.

 

On the matter of budgetary control. I have witnessed an ongoing truth: Irish governments learn economics by doing it to a country. As a public policy economist I have witnessed the abject stupidity of many economic decisions made in the past, the unquestioned ignorance that has “informed” semi-state governing boards and the unrelenting desire to let bad situations get worse. The aim of the 24 months of deficits and you lose your figurative credit card is about trying to prevent that in the university sector. In the lobby of the Provost’s House there is a large black box. It contains three equally foreboding padlocks. It was once the physical store of the cista communis the funds that paid the bills of the College and keep the silverware away from sticky fingers. The three locks were there for the Provost, Vice Provost and Bursar. Only if all three were present and agree  and with the consent of the 7 Senior Fellows would the box be opened and monies paid. It was simple. It was the model of every university in Europe at the time. It seemed to keep them solvent. My objective was that with fear of the Minister that higher education institutions would return that simple idea of solvency. There is no money on the never-never. The Minister may be subject to a soft budget constraint but you should not think that you have an automatic bailout as a result. Too much moral hazard at institutional level has been built into Irish public policy as one “private” body after another feels it has a right to the tax revenues of the Irish people. Morgan Kelly said in his recent speech that “we don’t do competence”. I argue that we need to stop treating incompetence as venial sin, it has consequences and those consequences should not be paid by everybody but by those that committed the action. Financial probity needs to be restored. If fear of the Minister taking over is the best method I can think of at present I am fully behind it. Now we just need to find a reliable accountant domiciled in Ireland.

 

The issue of tenure is not a simple one. I would have liked to start from a blank slate here but wasn’t given the opportunity. The controversy over the idea that academic tenure and public service norms and practices comes from two dimensions. One is that there is a lot of local confusion on the issue of academic tenure. Academic freedom is special. Academic tenure in America is special. Tenure in Ireland is not very special, especially after Cahill. Granted, Ireland has a concept of tenure while the UK has done away with it. The liquidation of academic departments, the renegotiation of contracts and other personnel policies in the UK has been an example of what a world without tenure looks like. I would argue that a policy that went “look at UK, do opposite” would be pretty good but you can’t legislate that way, at least since the 1930s. The other dimension is that of the pension guarantee. In 2010 the closed pension schemes of the NUI and Trinity College, as well as the IPA, ESRI and other semi-state bodies were taken over by the Exchequer. The total deficit was some €610m in 2010. To make matters worse, the revelation of pension top-ups in January of this year by the Sunday Independent did little to show that the sector was behaving to “civil service norms and practices”, the obligation made by the sector upon the liabilities being taken over by Merrion Street. The response by Merrion Street from 2010 onwards was clear. When it comes to staffing we are in charge now. The Employment Control Framework was sent to universities and since 2010 there has been a 12% reduction in staff across the sector. Staff are seen as contingent liabilities upon the State and are to be prevented at all costs. The problem is that the main cost of higher education and the main asset is held in human capital, the people doing the work. The strange thing that has happened is that the principle of the civil service, which is that it takes an act of God to promote you and an act of the Oireachtas to fire you, was not fully applied to academics following the Cahill judgement. My main aim was to ensure that if we had to accept the rules of Merrion Street in terms of hiring people and retiring people then we should get the protections of Merrion Street staff. I am certain that none of my colleagues in Trinity did anywhere near the damage to the country that the occupants of Merrion Street did on a wet September evening in 2008 and yet got to keep their jobs afterward.

Fixed term contracts are a matter of important consideration. The Fixed Term Workers Act has created fear in the sector but it is only fair that, as Senator Crown outlined, that the people who actually do the work are safe in their jobs. Much of the trouble related to the Fixed Term Workers Act has been the result of a bad client and not a bad law. Universities and IOTs needed to be more aware of labour law and comply with it, even if they don’t like the results. If the academic labour market is designed in such a fashion as to declare one’s career begun at PhD and finished after the second postdoc then it might be more useful to evaluate the humanity of the academic career as currently defined than to accuse a law designed to improve the lives of workers of thwarting academic progress. I have never claimed that academic labour market practices or behaviours were above question.

In terms of the progression and removal sections. These are the product of two sources of what I saw as best practice. The American Association of University Professors declaration on tenure and academic freedom and the Statutes of Trinity College. The Americans have years of case law and negotiation attached to this statement. Since it was at its outset derived from the trials and tribulations of Richard T. Ely and other economists who founded the American Economic Association in 1885, I was very pleased to try to incorporate those ideas into Irish legislation. The issues of removal were the product of seeing that the Trinity Statutes revision process was the most effective at addressing the local concerns about employment. As a person who was involved in such internal tribunals as a jury member I know how important such procedures are and I know that in the case of Trinity they made sure that people were retained that should be retained. In Ireland we need to especially careful since it is a small country and personality clashes and the willingness to destroy individuals for the sake of an institution far too often leave good people undone.

Ultimately I was very pleased to see that the Minister accepted the bill. I know that it will be changed and changed radically. I also know that I have started a conversation about this topic which has been allowed to remain silent for far too long as the civil servants and professional university managers play chess with higher education and those actually meeting students, speaking to colleagues and seeing former students emigrate watch, spectators and not participants in the policymaking process. The Hunt Report, the drive for “Key Performance Indicators” and all such things do not improve the knowledge of the Senior Freshman Economics student in the third row, in fact they may hinder it as staff are not replaced, researchers fear for their next small paycheque, and nobody pays any heed to project appraisal or transactions costs. My statement to the Minister and Merrion Street would be simple: give me a cheque, I’ll tell you what I spent it on. Then. Let me be able to do my job. That is why I wrote this legislation and why I want this response to be the start of the debate, not the end.

Sen. Sean D. Barrett, FTCD

16 April 2014